INFLUENCE OF INFORMATION TECHNOLOGY PRACTICES IN .

Weeks & NamusongeLimitationsThe researcher experienced challenges in data collection. Many respondents were skeptical ofthe information sought by the questionnaire that touched on their positions. The researcherhowever assured them that the data sought would be used exclusively for academic purposes.This study covered a single case of public sector organizations (JKUAT) hence generalization ofits findings to represent other public sector organizations should be done with caution.THEORETICAL FRAMEWORKThis study was guided by two theories. These include transaction cost economics theory andTechnology, Organization, and Environment Theory.Transaction Cost TheoryThis theory views firms as organizations comprising of people with different views andobjectives. It assumes that the market in determining the allocation of resources. This meansthe organization and structure of the firm determine price and production, with the unit ofanalysis being the transaction. The theory suggests that managers are opportunists andarrange firms’ transactions to their interest (Williamson, 1996).The main body of existing empirical work does not specifically or directly calculatetransaction costs, but uses statistical methods in order to obtain the answers to their researchquestions. Such indirect operationalization methods define transaction costs or the researchquestion directly as dependent variable. They define transaction dimensions, or even other subcategories of them, as independent. All of these direct and indirect calculations of transactioncosts are of ex post character, which represents another point of critique of TCT (Dyer, 1996).In a study done by Nooteboom (1999), he stressed that a transaction is part of anexchange process, with a history of events taking place before and after that moment at whichan agreement is reached and property or user rights are transferred. The production of goodsinvolved, or the actual transfer and delivery may well take place after some time. The time factorthus plays an important role in the transaction process. Transaction costs will rise withincreasing uncertainty about possible deviations between expectations and realization of theseexpectations, because of turbulence and demand uncertainty, technology, competition or thepolicy environment.Technology, Organization, and Environment TheoryTornatzky and Fleischer developed Technology, Organization, and Environment theoryin 1990 (Tornatzky& Fleischer, 1990). TOE theory identifies three aspects that influence theLicensed under Creative CommonPage 488

International Journal of Economics, Commerce and Management, United Kingdomprocess by which an organization adopts and implements a technological innovation:technological context, organizational context, and environmental context. Technological contextdescribes both the internal and external technologies relevant to the firm. This includes currentpractices and equipment internal to the firm, as well as the set of available technologies externalto the firm. Organizational context refers to descriptive measures about the organization such asscope, size, and managerial structure. Environmental context is the arena in which a firmconducts its business, its industry, competitors, and dealings with the government (Hsuet al.,2006).TOE provides a useful analytical framework that can be used for studying the adoptionand assimilation of different types of IT innovations such as ICT integration in procurement. TheTOE has a solid theoretical basis, consistent empirical support and the potential of application toIT innovations domain, though specific factors identified within the three contexts may varyacross different studies as suggested by Hsuet al. (2006).REVIEW OF VARIABLESInformation Technology PracticesInformation technology enhances efficiency and effectiveness of the procurement process. Anefficient procurement process in the public sector organizations will result in improvedperformance in public sector organizations (Dobler, 2002). At the public sector level, technologyenhances infinite and non-restricted access to government information and increases markettransparency and economic incorporation based on complementarities (Carayannis & Popescu,2005). Procurement technologies grasp a virtual market, open to capable suppliers (and goods)according to not mainly restrictive selection criteria, in which public administrations can choosegoods and services offered by several suppliers (Petrie, 2001). The whole process is digital,using digital signature in order to guarantee transactions lawfully. Among the main advantagesthat a public administration can get through a system like this there are: costs and processcutting, possible broadening of suppliers base, easy access to preferred goods (pre-definedquality standards), information intelligibility and ease of comparison among goods andpurchases logging and ensuing expenditure monitoring.The road to executing successful ICT indeveloping countries public procurement management is paved with difficulties, such asresistance from the bureaucracies involved; lack of decision making from the top; lack ofmotivation; weak human capital; corruption and fraud; and, in the case of conflict-riddencountries, the instability and violence that damage any efficient long-term work (Dobler, 2002).Moreover, ICT systems are knotty, expensive, and difficult to manage and maintain.Licensed under Creative CommonPage 489

Weeks & NamusongeOrganizational PerformanceOrganizational performance refers to the effectiveness of tools designed to carry out the firm’spurchasing and corresponding corporate strategies. Burt and Doyle (2003) identified a numberof strategic objectives of the e-purchasing function. These objectives were continuous qualityimprovement, total inventory management, time-based competition, technology access andcontrol, and risk reduction.Organizational performance varies according to various elements of the organization,including strategy, structure, environment, organizational learning, and resource (Cho et al.2007). Accordingly, different measurements have been adopted by different researchers formeasuring performance. Jiang and Qureshi (2006) measure performance as operationalperformance, which include cost efficiency, profitability and productivity. Morash et al. (1996)classified their measurement based on demand-oriented capabilities (that is delivery reliability,responsiveness to target market, and post-sale customer service) and supply-orientedcapabilities (that is geographical coverage and reduction in total distribution cost).Conceptual FrameworkThis study conceptualized that information technology is expected to affect the dependentvariable which in this case was organizational performance. The relationship of these variablesis summarized in conceptual framework figure 1.Figure 1: Conceptual FrameworkInformation Technology Practices Digital signature Complements manual systems Virtual market Variety of capable suppliersIndependent VariablesOrganizational Performance Service delivery Efficiency Effectiveness Continuous qualityimprovementDependent VariableEMPIRICAL REVIEWThe potentials of procurement strategy in enhancing organizational performance have alreadybeen proven in a number of studies (Aberdeen Group, 2011). According to these studies,procurement strategy enables companies to decentralize operational procurement processesand centralize strategic procurement processes as a result of the higher supply chaintransparency provided by procurement systems. An organization's procurement function isLicensed under Creative CommonPage 490

International Journal of Economics, Commerce and Management, United Kingdomsubdivided into strategic and operational processes since activities and priorities in these twoareas are entirely different (Kaufmann, 2009). Supplier management, the pooling of purchaserequisitions and procurement-oriented product development are tasks that are typicallyassigned to strategic procurement. Strategic procurement often have to deal with administrativeroutine work as well, such as individual transactions, converting purchase requests intopurchase orders or ensuring the correct allocation of invoices received. Strategic aspects arefrequently neglected in the process, with the buyer having little influence over the choice ofsuppliers and the purchased products (Sollish & Semanik, 2012).Johnston (2005) argued that costs have to be managed well to achieve theorganization's performance goals. There are several key success factors, related to both thecompetency of the service provided by an intermediary and to the organizations own internalcapabilities. One key success factor relating to inventory management is technical capability ofthe system (Johnston, 2005). Johnston (2005) specified technical service quality in terms ofsystem cost (security, reliability, easy to use, accessibility) and service quality (such asresponsiveness of service). In addition, trust in the service provider is another major successfactor for strategic procurement adoption (Rotchanakitumnuai & Speece, 2009).Organizational record management systems and information flow also have a majorinfluence on the organizational performance (Croom & Brandon-Jones, 2007). Organizationalrecord management is an important driver for increasing internal process improvement,enhancing learning and innovation including the knowledge of purchasing personnel, theircomputer skill and resources. Record Management support is key influence organizationalperformance (Rotchanakitumnuai & Speece, 2004). Positive management support for eprocurement can ensure system adoption success. Training is the best support to enablepersonnel to use the records more efficiently. Croom & Brandon-Jones (2007) found that recordmanagement is one key success factor of strategic procurement implementation. Recordmanagement makes the procurement process more transparent and helps organizationsachieve good governance impacts (Hui et al., 2011).Research GapsThe reviewed literature have acknowledged the importance of information technology inprocurement but over emphasized on its technical capability (Johnston, 2005) to improveorganizational performance. Koech and Namusonge (2015) observed that procurementregulation compliance, procurement procedures, professionalism and transparency affectedprocurement performance at the National Treasury. However, they did not look at theinformation technology practices in procurement influencing overall organizational performance.Licensed under Creative CommonPage 491

Weeks & NamusongeWahu, Namusonge, Mungai and Chilion (2015) found that procurement performance contributesto the overall performance of an organization through cost savings, improved quality andreduced lead times which lead to internal customer satisfaction. However, the authors did notaddress the specific procurement practices such as information technology that influence theoverall performance of an organization.Previous studies have not shown how information technology in procurement can affectorganizational performance. Previous studies have been preoccupied with supplier selection(Sollish & Semanik, 2012), records management (Croom & Brandon-Jones, 2007), goodgovernance (Hui et al., 2011) and cost reduction (Johnston, 2005). This study therefore soughtto bridge this gap by studying the information technology practices in procurement affectingorganizational performance at JKUAT.RESEARCH METHODOLOGYResearch DesignThis study used a descriptive survey design. This research design was preferred due to itsability to combine quantitative and qualitative methods. The design enabled the researcherobtain information from a large population using a standardized instrument of data collectionand is recommended by Kothari (2004) and Mugenda & Mugenda (2003). It was thereforesuitable for this study.Target PopulationTarget population is the entire group of individuals or items under consideration in any field ofinquiry and has a common attribute (Mugenda & Mugenda, 2003). The target population for thisstudy was procurement officers and managers of all campuses of Jomo Kenyatta University ofAgriculture and Technology. Jomo Kenyatta University of Agriculture and Technology has 8campuses in Kenya. The target population was 41 procurement officers and managers (JKUATPrincipal Procurment Officer, 2015). Most of the procurement officers and managers are basedat JKUAT Juja Campus.SamplingProcurement officers and managers at JKUAT Juja Campus were selected as sample. Thisstudy therefore had 36 respondents.Licensed under Creative CommonPage 492

International Journal of Economics, Commerce and Management, United KingdomTable 1: Target Population and SamplingCadre of StaffTarget PopulationJuja CampusChief procurement officer grade 1511Principal procurement officer grade 1411Assistant procurement/ store officer II grade 911Assistant procurement/ store officer II grade 883Procurement/ store assistant I grade 777Procurement/ store assistant II grade 622Senior procurement/store clerk grade 51515Procurement/store clerk grade 433Procurement/store clerk grade 322Procurement/store clerk grade 211Total4136Data Collection MethodsPrimary and secondary data were collected for this study. Primary data was collected using astructured questionnaire administered to procurement officers in all JKUAT campuses. Thequestionnaire had three sections. The first section entailed general information of therespondents while the second section sought information on information technologyrespectively. The third section sought information on the organizational performance of JKUAT.Key informant interviews were conducted among five procurement managers at JKUAT maincampus at Juja. Face-to-face interviews were conducted with the five key informants.Data Collection ProceduresQuestionnaires were administered through drop-and-pick-later method to give respondentsample time to respond to the questions. This method ensured a high response rate andaccuracy as the respondents did not feel under pressure to fill the questionnaires but did so attheir convenience. The questionnaires were therefore self-administered since procurementofficers are literate and understand fully the phenomenon under investigation.Data Analysis and PresentationBoth quantitative and qualitative methods were therefore used. Descriptive statistics andinferential statistics were used to analyze quantitative data. Descriptive statistics included meanscores, frequencies and percentages. Inferential statistics involved correlation analysis usingPearson Coefficient and multiple linear regression analysis using the following model:Y α β1X1 εLicensed under Creative CommonPage 493

Weeks & NamusongeWhere Y is organizational performanceX1 Information Technologyβ1 is the coefficient of corresponding variableε is the error termQualitative data were analyzed using content analysis. Responses from interviews werecategorized based on emerging themes. This categorization helped the researcher in makingconclusions as the qualitative information was used to support or supplement quantitative data.EMPIRICAL RESULTS AND DISCUSSIONResponse RateThis study targeted 36 procurement officers and managers at JKUAT Juja Campus. Afteradministering the questionnaires, the researcher got 32 questionnaires filled by procurementofficers and managers. This translates into 88.9% response rate which was consideredadequate for analysis and making conclusions. Babbie (2002) argued that a response rateabove 50% is adequate for analysis and making conclusions.General InformationRespondents were asked to indicate their gender. Results show that majority of the respondentswere male (53.1%) as compared to 46.9% of the respondents who are female. Figure 2 showsthese results.Figure 2: Respondents' Distribution by Gender46.9%(15)Key53.1%(17)MaleFemaleThe researcher asked respondents to indicate their position at JKUAT. The results in table 2show that majority of the respondents were procurement officers (71.9%) while procurementmanagers were 18.8%. Only 9.4% of the respondents indicated their position as other.Licensed under Creative CommonPage 494

International Journal of Economics, Commerce and Management, United KingdomTable 2: Respondents' Distribution by PositionPositionFrequencyPercentProcurement manager618.8Procurement officer2371.9Other39.4Total32100.0Respondents were asked to indicate the duration that they have worked at JKUAT. The resultsin table 3 show that 43.8% of the respondents had worked at JKUAT for 4-7 years while 25% ofthe respondents had worked in the organization for 3 years and below. Respondents whoindicated that they had worked for JKUAT for 8-11 years were 18.8% while those who hadworked for 12 years and above were 12.4%.Table 3: Respondents' Distribution by Duration Worked at JKUATAgeFrequencyPercent"3 years and below"825.0'4-7 years'1443.8'8-11 years'618.8'12 years and above'412.5Total32100.0Information Technology PracticesThe researcher asked respondents to rate information technology in procurement at JKUAT.The results in figure 3 show that 40.6% of the respondents rated information technology inprocurement at JKUAT as moderately high. In addition, 34.4% and 15.6% rated the same ashigh and very high respectively. Only 9.4% of the respondents rated information technology inprocurement at JKUAT as poor. One of the key informants by the name James (not real name)described information technology at JKUAT as “excellent”. James said that “the use of SAGEsystem is critical in procuring goods and services and managing inventory”. Jecinta (not realname) described the use of SAGE and ACCPAC in the organization as “the best”. The keyinformants emphasized that information technology has reduced manpower, improved efficiencyand enabled easy retrieval of records. According to the key informants, information technologyhas also improved security in procurement system minimizing chances of fraud.Licensed under Creative CommonPage 495

Weeks & NamusongeFigure 3: Information Technology in Procurement at ately highHighVery highFour statements regarding information technology in procurement were presented to therespondents and they were asked to indicate their agreement or disagreement with thosestatements. The results in table 4 show that respondents agreed that information technologyhas opened an opportunity for JKUAT to deal with a variety of capable suppliers (M 3.53). Thisis in agreement with Dobler (2002) that information technology opens an opportunity to enhanceefficiency and effectiveness of the procurement process that will result in improvedperformance. According to the study findings, respondents disagreed that there is use of digitalsignature for lawful transactions (M 2.66) and information systems in procurementcomplements manual systems (M 3.47).The results contrast findings by Carayannis and Popescu (2005) that technologyenhances infinite and non-restricted access to information and increases market transparencyand economic incorporation based on complementarities. Respondents also disagreed with thestatement that information technology has given JKUAT a virtual market where goods andservices can be assessed and compared (M 3.00). The findings differed with those of Petrie(2001) who argued that procurement technologies grasp a virtual market, open to capablereliable suppliers in which an organization can choose goods and services offered by severalsuppliers.Licensed under Creative CommonPage 496

International Journal of Economics, Commerce and Management, United Kingdom15.6% 34.4%

INFLUENCE OF INFORMATION TECHNOLOGY PRACTICES IN PROCUREMENT ON ORGANIZATION PERFORMANCE IN PUBLIC INSTITUTIONS IN KENYA A CASE OF JOMO KENYATTA UNIVERSITY OF AGRICULTURE AND TECHNOLOGY Mardia Paige Weeks Msc. Student, Jomo Kenyatta University of Agricult